Byzantine Beijing

China’s Party Congress is held every five years. The 17th Party Congress will start on Monday and end next Friday. China’s President gets two five-year terms. At the end of his first term the Party Congress chooses his successor who is groomed for five years before becoming the President himself. The 17th Congress should indicate President Hu Jintao’s clout in the remaining five years of his tenure. A clear signal may be provided by the choice of his successor to be anointed in 2012. There is dissension about who it should be. Former President Jiang Zemin is apparently opposing Hu’s choice of successor.

Jiang was considered marginalized after he relinquished the chairmanship of the Central Military Commission (CMC). But Hu’s drive against corruption, purging Jiang’s favourites, indicated that a power struggle continued. Most purged victims were identified with the Shanghai group, closely linked to Jiang. This group had exercised unfettered power during Jiang’s tenure.

Hu is reportedly backing Li Keqiang, 52, the top party official in Liaoning province as his successor. Jiang is backing the new party leader in Shanghai, Xi Jinping, 54. Xi is a scion of the Shanghai group. This group has traditionally neutralized the authority of Beijing. If Hu fails to get his man in it would greatly undermine his authority and make him a virtual lame duck.

Western observers believe that the Hu-Jiang dissension is a power struggle unrelated to policies. This is assumed because there seems broad consensus on Hu's stated policy of creating "the harmonious society" through improving health and social services, and by reducing the vast income disparities between cities and villages. This apparent consensus could be misleading. There are serious divisions between Hu and Jiang regarding not only domestic priorities but also foreign policy.

Shanghai represents China’s affluent south and its overseas-linked coastal belt. Beijing worries about the poorer north, about rampant corruption among party officials in provinces, and about China’s increasingly exploited and rebellious peasantry. Chinese farmers, with tacit consent of Beijing, are expected to put forward 1000 petitions in the Party Congress.

Alarming conditions in the interior impelled Hu’s crackdown against corruption targeting Jiang’s loyalists. The most prominent among them was Chen Liangyu, the powerful CPC Shanghai party chief who was disgraced and arrested for corruption in September 2006. He was one of the closest allies of Jiang Zemin.

Differences between Hu and Jiang regarding foreign policy are equally significant. It was under Jiang that People’s Liberation Army (PLA) exponentially expanded business operations in the US, got involved in the narcotics and illegal arms trade, indulged in nuclear proliferation, and abetted insurgency and terrorism in and among different nations. This created powerful vested interests in the army and in the party. That is why it remains unclear how much control Hu actually exercises over the PLA. Mixed signals from China in the immediate aftermath of North Korea’s nuclear test, and China’s claim to all of Arunachal Pradesh despite earlier assurances of not disturbing settled populations, do indicate possibility of a rift at the top in Beijing.

The outcome of the Hu-Jiang struggle could have long term implications for China’s relations with the US and with Israel. During the Soviet era Israel became China’s second biggest armaments supplier after Russia. America turned a blind eye to this. But after the collapse of the Soviet Union the US attitude changed. Tension developed between America and Israel because Washington wanted to curb Israel’s defence links with China. Right from 1992 under President George Bush Senior, through the Clinton years, tension simmered between the US and Israel over this issue. Washington sought embargos on Israel’s selling defence equipment to China. Israel continued to defy America. The CIA consistently criticized Israel’s dealings with China. In October 1993 CIA Director R. James Woolsey confirmed to a Senate committee: "We believe the Chinese seek from Israel advanced military technology that U.S. and Western firms are unwilling to provide." And Israel apparently was ready to oblige. 

Differences arose over Israel’s transfer to China of US technology from the Lavi fighter program, and over Israel’s supply to it of four Phalcon planes upgraded with Russian radar systems. Under pressure of the Clinton administration Israel reluctantly canceled the latter deal. The flashpoint came in 2005. In the guise of repairing the Harpy assault drone that Israel sold to China in the mid-1990s, it upgraded the drones capable of destroying radar stations and anti-aircraft batteries. US Undersecretary of Defense for Policy Douglas Feith, the third most senior official in the Pentagon, demanded the resignation of Amos Yaron, the top bureaucrat in Israel’s Defense Ministry, over the Harpy controversy. Matters were smoothed out only after considerable effort.

It should not surprise, then, if some sections in Israel welcome Jiang’s return to a position of decisive influence. Especially because China has flown recently a kite that might seriously alarm Israel. A US-based historian and technology consultant, Song Hongbing, recently wrote a book, Currency Wars. It is unabashedly anti-Semitic and traces sinister international financial conspiracies to the Rothschild family. The book has become a rage in Hu’s China. Over half a million copies of it are in circulation. Significantly the book has been published by China’s state-owned China International Trade and Investment Corporation (CITIC) group. Could CITIC have done this without a nod from the top?

India should, for its part, worry for being an obvious and soft target for China. In communist dictatorships power struggles sometimes result in one of the aspirants instigating a foreign adventure in order to alter the balance of power. If the Hu-Jiang rivalry escalates to a fight to the finish, India should be doubly cautious. There are current reports of Chinese incursions into Bhutan. Meanwhile PLA has made claims against India on the Sikkim border. Will the Hu-Jiang rivalry reach an early resolution?